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Contractual arrangements between farmer cooperatives and buyers in China

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Author Info

  • Jia, Xiangping
  • Huang, Jikun

Abstract

The agrofood market in China is dominated by spot market exchanges of small farmers and various small traders, with only minor penetration of the modern supply chain at the farmgate. The emerging Farmer Professional Cooperatives (FPCs) are expected to facilitate vertical coordination. The overall goal of this study is to investigate the contractual arrangements between the FPCs and the buyers. Based on a national representative survey of 157 FPCs in China, this study shows that 32% of FPCs introduced written contracts in the primary marketing channel. Contracts are more likely to be adopted in the livestock sector and are positively related to the scale of production. While branding promotes contracts between FPCs and buyers, public certification of quality and food safety often substitutes for contracts. Furthermore, the membership heterogeneity of FPCs affects an FPC’s decision to use contractual arrangements with the buyer.

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Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 36 (2011)
Issue (Month): 5 ()
Pages: 656-666

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Handle: RePEc:eee:jfpoli:v:36:y:2011:i:5:p:656-666

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Web page: http://www.elsevier.com/locate/foodpol

Related research

Keywords: Farmer cooperatives; Vertical coordination; Contract; Standards; China;

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Cited by:
  1. Yang, Huan & Klerkx, Laurens & Leeuwis, Cees, 2014. "Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China," Agricultural Systems, Elsevier, vol. 127(C), pages 115-125.
  2. Zhang, Lei & Zhu, Xueqin & Heerink, Nico & Shi, Xiaoping, 2014. "Does output market development affect irrigation water institutions? Insights from a case study in northern China," Agricultural Water Management, Elsevier, vol. 131(C), pages 70-78.
  3. Ito, Junichi & Bao, Zongshun & Su, Qun, 2012. "Distributional effects of agricultural cooperatives in China: Exclusion of smallholders and potential gains on participation," Food Policy, Elsevier, vol. 37(6), pages 700-709.
  4. Michelson, Hope & Boucher, Steve & Bai, Junfei & Jia, Xiangping & Huang, Jikun & Chen, Xinzhe, 2013. "Supermarket Supply Chains with Chinese Characteristics: The Case of Walmart's Direct Farms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150441, Agricultural and Applied Economics Association.
  5. Trebbin, Anika, 2014. "Linking small farmers to modern retail through producer organizations – Experiences with producer companies in India," Food Policy, Elsevier, vol. 45(C), pages 35-44.

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